Without revealing many details of the vehicle, Volkswagen said it would build the vehicle at the Chattanooga plant, and create 2,000 new jobs. Production is scheduled for the end of 2016. Volkswagen also builds the Passat at this plant.
Volkswagen sees the seven-passenger vehicle as part of its efforts to restart growth in the U.S. market.
"The Chattanooga-built mid-size SUV will allow us to fulfill the wishes of our dealer network, bringing new customers to our showrooms and additional growth for the brand," said Michael Horn, president and CEO Volkswagen Group of America.
Volkswagen hasn't announced powertrain options for the SUV. The CrossBlue Concept is a diesel-electric hybrid vehicle.